ZM is down nearly 50% from its November 2020 peak
Zoom Video Communications, Inc. (NASDAQ:ZM) is an American communications technology company headquartered in San Jose, California. Zoom's communications platform provides video and online chat services through a cloud-based peer-to-peer software platform and is used for teleconferencing, telecommuting, distance education, and social relations. This afternoon, ZM is trading down 3% at $250.73, earlier hitting an annual low of $249.
Zoom Video Communications announced on Nov. 1 that it will release its financial results for the third quarter of fiscal 2022 on Monday, Nov. 22, after the market closes. Wall Street analysts expect that the communications technology will post $1.09 for the report.
ZM has decreased about 36% in price year-over-year and 48% since peaking at its November 2020 peak of $486.83. Additionally, shares of ZM have fallen 25% year-to-date.
Moreover, ZM is beginning to reach an intriguing valuation once again after Zoom stock’s bearish run over this past year, bringing Zoom stock's price-earnings ratio down to 75.74. Although the figure is still high, it is a much more reasonable value for a company growing as quickly as Zoom Video Communications has.
Zoom also has an exceptional balance sheet with $5.11 billion in cash and just $100 million in total debt, giving ZM the freedom to expand without the worry of any substantial interest accumulating on a low debt balance.
Overall, Zoom stock is offering a great buy-the-dip opportunity for long-term investors. However, Zoom stock could also drop significantly lower in the short-term should it fail to meet earnings expectations later this month, making it a high-risk, high-reward investment opportunity at this time.
Shorts have been hitting the exits on ZM, with short interest down 25% during the past two reporting periods. This accounts for 4.5% of the stock's total available float, or just over two days' worth of pent-up buying power.